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News
Qatar
 IQCD reports in-line 2Q2018 with 82.1% YoY increase but 2.1%
QoQ decline in net profit – Industries Qatar’s (IQCD) net profit
rose 82.1% YoY (but declined 2.1% QoQ) to QR1,241.71mn in
2Q2018, in line with our estimate of QR1,204.48mn (variation of
+3.1%). The company’s consolidated revenue, which represents
the steel segment, came in at QR1,645.37mn in 2Q2018, which
represents an increase of 79.4% YoY (+19.4% QoQ). Steel was
again stronger-than-expected with revenue beating our
estimate of QR1,308.94mn by 25.7%. EPS increased to QR4.15
in 1H2018 from QR2.66 in 1H2017. According to the company,
1H results are well ahead of the group budget expectations for
2018. Further, improved product prices, stable sales volumes,
efficiently managed operating assets base, and continued focus
on cost improvements were the driving forces behind its
performance. In 1H2018, steel revenue jumped significantly by
49.3% to QR3.02bn, following a combination of moderate
improvement in sales volumes and selling prices. On the other
hand, on a like-for-like basis, management reporting revenue,
assuming proportionate consolidation, was QR8.1bn, up 24%
over 1H2017 due to the combined effect of improved prices and
volumes versus the previous year. The group’s sales volumes
improved moderately on last year, despite a number of planned
and unplanned shutdowns in some facilities. Polyethylene sales
improved through higher production, as the segment was on an
extended unplanned shutdown during 1H2017, specifically
during 1Q2017. Recovery in global demand has aided the
group’s fertilizer segment, while the sales of steel products
have improved due to the change of geographical mix. Product
prices across most segments moderately increased versus the
comparable period of 2017. Polyethylene prices have started to
stabilize, while fuel additive prices have improved notably
compared to last year. Increase in raw materials costs and
resurgence of demand in some geographies were the key factors
those contributed to the increase in the steel prices, IQCD
stated. The group’s financial position remains solid, as cash
across the group stands at QR10.2bn after paying 2017’s
dividend of QR3.0bn, with periodic debt payments amounting
to QR0.3bn. Total debt across the group now stands at QR0.2bn,
down from QR0.5bn as of December 31, 2017. In July, rating
agency Moody’s Investors Service affirmed its ‘A1’ rating for
IQCD and changed the outlook to ‘Stable’ from ‘Negative’. We
are of the view that these are a strong set of results and bottom-
line performance would have been even stronger if the
company did not report a loss of QR77.13mn from its steel
associates (vs. a QR43.56mn profit in 2Q2017 and a QR21.0mn
profit in 1Q2018) along with a substantial increase in selling
costs. We expect to revise our 2018 net income estimate
upward given strong 1H2018 results. (QNBFS Research,
Company releases, Gulf-Times.com)
 QGMD reports net loss of QR2.17mn in 2Q2018 – Qatari German
Company for Medical Devices (QGMD) reported net loss of
QR2.17mn in 2Q2018 as compared to net loss of QR2.11mn in
2Q2017 and QR2.23mn in 1Q2018. The company’s revenue
came in at QR2.59mn in 2Q2018, which represents an increase
of 0.5% YoY (+31.5% QoQ). Loss per share amounted to QR0.38
in 1H2018 as compared to QR0.37 in 1H2017. In 1H2018, QGMD
reported net loss of QR4.40mn as compared to net loss of
QR4.32mn for the comparable period of the previous year. (QSE)
 PwC report: Qatar’s sovereign bond of $12bn largest in 2Q2018
– Qatar has issued the highest value of sovereign bond at
$12.0bn in 2Q2018, according to a report by PwC Middle East
(PwC). The report stated Qatar issued a bond, which consisted
of three tranches: a $3.0bn 5-year tranche, a $3.0bn 10-year
tranche, and a $6.0bn 30-year tranche. In addition, the
government of Saudi Arabia issued a triple-tranche bond total
valued at $10.9bn. Led by Qatar and Saudi Arabia, the GCC
sovereign bond market witnessed proceeds of $22.9bn in
2Q2018 from its two largest sovereign bond issuers, PwC stated.
The $12.0bn sovereign bond issued by Qatar represents the
largest placement by an emerging market sovereign so far this
year. On the corporate front, debt activity has been relatively
slow. However, with the recent recovery in oil prices and
improvement in government fiscal deficits, sovereign debt
issuances are expected to taper in the latter half of 2018,
according to PwC. (Gulf-Times.com)
 PetroChina, Qatar in advanced talks on LNG supply deals –
PetroChina Company Limited (PetroChina) is in advanced
discussions with Qatar to purchase liquefied natural gas (LNG)
under short and long-term agreements, according to sources.
China needs to secure LNG to supply its push to replace coal
with cleaner burning natural gas to reduce air pollution. After
China started the program last year, China has overtaken South
Korea as the world’s second-biggest buyer of LNG. Tying up
with Qatar, the world’s biggest LNG producer makes sense as
the Middle Eastern country seeks buyers for a planned output
expansion. (Zawya)
 ASEAN to strengthen business ties with Qatar – Embassies of
ASEAN member countries in Qatar look forward to further
strengthening the partnership and increasing bilateral
investments with Qatar, according to Malaysian Ambassador to
Qatar HE Dato’ Ahmad Fadil Bin Shamsuddin. Fadil said, “The
ASEAN Embassies accredited in Doha namely Brunei,
Indonesia, Malaysia, Philippines, Singapore, Thailand and
Vietnam look forward to increasing bilateral investments of
Southeast Asia and Qatar.” The envoy said the distance that
separates ASEAN and GCC has been narrowed down by
developments of investment opportunities through high level
visits between the two regions. In particular, he highlighted the
importance of recent and future visits by Amir HH Sheikh
Tamim Bin Hamad Al Thani to Southeast Asia in bolstering
partnership between Qatar and ASEAN. (Peninsula Qatar)
International
 US mortgage activity falls to two-and-a-half year low – US
mortgage application activity decreased to its lowest in 2-1/2
years last week, as loan requests to refinance an existing home
fell to their weakest level since December 2000, according to
the Mortgage Bankers Association (MBA). The US based
group’s seasonally adjusted index on weekly home loan
requests fell 3% to 342.5 in the week ended August 3. This was
the lowest reading since 328.6 in the week of January 1, 2016.
(Reuters)
 US cuts 2018 crude oil production growth forecast – US crude oil
production in 2018 was expected to grow at a slower rate than

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previously forecast amid lower crude prices according to a
monthly US government report. US crude production has
climbed dramatically, fuelled largely by increased output from
shale formations, but may now rise more slowly as prices drop.
Output is expected to rise 1.31mn barrels per day (bpd) to
10.68mn bpd in 2018, lower than last month’s forecast of
growth of 1.44mn bpd to 10.79mn, according to the US Energy
Information Administration. (Qatar Tribune)
 Japan’s machinery orders tumble, stoke doubts on capex –
Japan’s core machinery orders tumbled in June at the fastest
pace in six months, with firms expecting another modest drop
in the third quarter in a sign capital expenditure may slow,
especially as international trade worries cloud the horizon. The
8.8% fall in core machinery orders, a highly volatile data series
regarded as a leading indicator of capital spending, was more
than the median estimate for 1.3% decline in a Reuters poll and
marked the biggest drop since December 2017. Manufacturers
surveyed by the Cabinet Office have forecast that core orders
will edge down 0.3% in July-September after 2.2% increase in
April-June. (Reuters)
 China’s July factory inflation slows but consumer prices
accelerate – China’s factory price inflation cooled in July, but
not as much as expected, amid a wider slowdown in economic
growth as China remains locked in a heated trade dispute with
the US. However, consumer inflation picked up from the
previous month, largely due to rise in non-food prices, official
data showed. The July inflation data is the first official reading
on the impact on prices from China’s retaliatory tariffs on
$34bn of US goods that went into effect on July 6 and apply to a
range of products from soybeans, to mixed nuts and whiskey.
While policymakers are watching price pressures, the central
bank is likely to give priority to policies that help shore up the
slowing economy. The producer price index (PPI), a gauge of
factory gate inflation, rose 4.6% in July from a year earlier,
compared with acceleration to 4.7% in June, according to the
National Bureau of Statistics. (Reuters)
 China to slap additional tariffs on $16bn of US goods – China is
slapping additional tariffs of 25% on $16bn worth of US imports
from fuel and steel products to autos and medical equipment,
the Chinese commerce ministry stated, as the world’s largest
economies escalated their trade dispute. The tariffs will be
activated on August 23, the ministry stated, the same day that
the US plans to begin collecting 25% extra in tariffs on $16bn of
Chinese goods. The US published its final list of goods subject to
the new tariffs. China’s final list announced differs from an
earlier draft it published in June, which included crude oil. The
number of categories of goods subject to tariffs rose to 333 from
114 in the June draft, although the total value is unchanged.
(Peninsula Qatar)
 Turkey to continue buying natural gas from Iran despite US
sanctions – Turkey will continue to buy natural gas from Iran in
line with its long-term supply contract, Turkey’s Energy
Minister said, a day after US President, Donald Trump
threatened that anyone trading with Iran will not do business
with America. NATO member Turkey is dependent on imports
for almost all of its energy needs and Iran is a key supplier of
Ankara’s natural gas and oil purchases. While the Turkish
refiner Tupras has already cut back on oil shipments from
Tehran, a complete halt of energy imports would be near
impossible. (Reuters)
Regional
 Saudi Arabia’s budget deficit stood at SR41,690mn in 1H2018 –
Saudi Arabia’s budget deficit was SR41,690mn in 1H2018 as
compared to SR72,728mn in 1H2017, according to Saudi
Arabia’s Ministry of Finance. Revenues came in at
SR439,851mn as compared to 307,982mn in 1H2017.
Expenditures were recorded at SR481,542mn as compared to
380,710mn in 1H2017. (Bloomberg)
 Saudi Arabia likely to miss its unemployment target – The
Saudi Arabian government’s National Transformation Program,
a set of development objectives for 2020, is aiming to cut the
unemployment rate to 9%, a reduction that would require the
creation of at least 700,000 jobs in the next two years,
according to Bloomberg Economics. That’s unlikely to be
achieved and the government now thinks it’s a tall order as in
the 2018 budget statement it projected that joblessness would
fall to 10.6% by 2020. Even that forecast is optimistic too, as it
requires the creation of around 600,000 jobs, a goal unlikely to
be met given the current economic conditions. (Gulf-
Times.com)
 Saudi Aramco to buy Lanxess’ stake for $1.6bn – Saudi Aramco
is buying the 50% it doesn’t own in a synthetic-rubber joint
venture with Lanxess for $1.6bn, as Saudi Aramco deepens its
push into chemicals. The sale of the holding in the Arlanxeo
venture is subject to approval from antitrust regulators, with
the deal expected to close by the end of the year. The company
will use the proceeds to reduce debt. (Bloomberg)
 Atraba Integrated Holding plans $1bn medical city in Egypt –
Saudi Arabia’s Atraba Integrated Holding announced its plan to
build an integrated medical city project over a sprawling
500,000 square kilometer area in Egypt at an initial investment
of $1bn, according to a report. The project financing and fund
company is looking to partner with local players on the project.
Chairperson of Atraba Integrated Holding, Fawaz Mohammed
Bashraheel said that the project will be set up with the help of a
consortium comprising some Egyptian investors.
(GulfBase.com)
 Peru’s exports to the UAE hit $600mn in 2017 – Exports from
Peru to the UAE increased from $6mn in 2011 to $600mn in
2017, due to increasing demand from consumers and the
ongoing work of the Dubai-based Trade, Tourism and
Investment Office of Peru (TTIOP). Since 2016, major UAE
businesses such as DP World and Abu Dhabi Investment
Authority have made multi-million-Dollar investments in the
country’s shipping, logistics and energy sectors due to increase
in trade and improving bilateral relations. (GulfBase.com)
 Oman’s real estate deals hit OMR1.5bn in 1H2018 – Oman’s real
estate sector witnessed solid growth in 1H2018, netting
OMR1.5bn from a total of 208,966 transactions during 1H2018,
according to a report. Out of this figure, a record OMR79mn
worth of deals were made in just five days, from July 15 to July
19. The highest number of sales transactions took place in
capital Muscat, followed by the governorate of North Al
Batinah. At the governorate level, a total of 208,966 real estate
transactions were recorded in 1H2018, of which, 39,687

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transactions were registered in capital Muscat followed by
11,169 in Dhofar. (GulfBase.com)
 CBO issues treasury bills worth OMR42mn – The Central Bank
of Oman (CBO) raised OMR42mn by way of allotting treasury
bills. The treasury bills are for a maturity period of 28 days,
from July 8, 2018 until September 5, 2018. The average accepted
price reached 99.843 for every OMR100, and the minimum
accepted price arrived at 99.840 per OMR100. Whereas the
average discount rate and the average yield reached 2.04692%
and 2.05014%, respectively. The interest rate on the Repo
operations with CBO is 2.583%, while the discount rate on
Treasury Bills Discounting Facility with CBO is 3.333%, for the
same period. (GulfBase.com)
 Salalah Port braces for impact from trade war – Salalah Port
warned that an impending trade war between the US and major
economic powers, combined with US’ decision to reinstate
sanctions against Iran, will negatively impact its operations,
both on the Container and General Cargo sides of its business.
Salalah Port Services Company’s Chairman, Ahmed Bin Nasser
Al Mehrzi said, “The escalating trade war between the US and
its closest traditional trading partners coupled with its current
international policy decisions in US will impact global GDP
growth and thus seaborne trade globally.” (GulfBase.com)
 Omantel signs MoU with Blockchain Solutions & Services –
Oman Telecommunications Company (Omantel) signed a
Memorandum of Understanding (MoU) with Blockchain
Solutions & Services (BSS) for mutual cooperation between the
two companies which include availing the smart solutions
offered by BSS in logistics and commercial operations. The MoU
comes as part of Omantel’s ongoing efforts in offering smart
solutions for digital transformation and laying the groundwork
for smart cities’ ICT (Information and Communications
Technology) services. (GulfBase.com)
 SALAM’s net profit narrows to BHD4.1mn in 2Q2018 – Al Salam
Bank-Bahrain (SALAM) recorded net profit of BHD4.1mn in
2Q2018 as compared to BHD4.6mn in 2Q2017. Income from
financing assets came in at BHD11.1mn as compared to
BHD10.8mn in 2Q2017. Total operating income came in at
BHD14.2mn as compared to BHD15.1mn in 2Q2017. Total
assets stood at BHD1,615.10mn at the end of June 30, 2018 as
compared to BHD1,589.23mn at the end of December 31, 2017.
Financing assets stood at BHD769.62mn, while placements
from customers stood at BHD622.91mn at the end of June 30,
2018. EPS came in flat YoY at BHD0.002 in 2Q2018. (Bahrain
Bourse)
 Investcorp explores investment opportunities in China, India
and Saudi Arabia – Investcorp is exploring investment
opportunities in China, India and Saudi Arabia, its co-CEO, Rishi
Kapoor said. The firm also expects to reach a level of $50bn
assets under management within next five to seven years.
(Reuters)